The official "blog of bonanza" for Alfidi Capital. The CEO, Anthony J. Alfidi, publishes periodic commentary on anything and everything related to finance. This blog does NOT give personal financial advice or offer any capital market services. This blog DOES tell the truth about business.

Friday, February 11, 2011

Trucking Success Implies High Yield

Let's talk a little about yield, or the trucking measurement for revenue per hundredweight. How does a company maximize it?

Hiring a senior exec who focuses on yield management is one way, as Con-way Freight is doing right now. It works if the exec has a plan to cut across the firm and gets buy-in from every business unit. This hire had better have an excess of charisma and networking ability.

Product focus helps. Limiting your freight to stuff that commands a premium - like perishables - means you've staked out a niche in a channel where customers absolutely must pay to have something delivered on time. It also means you deliberately prune away low-cost business lines using your hand-dandy BCG growth-share matrix.

Tiered pricing helps. Charge more for rush deliveries. Don't eat costs like bridge tolls if you can compete on non-price service metrics like timeliness. If you have to pass on fuel surcharges to your customer, don't count them towards yield. Fuel costs are mostly out of a company's control although they can be partially hedged with energy futures.

Reader, your thoughts are always welcome. There must be plenty of people out there with relevant wisdom.

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Alfidi Capital is a private financial research firm.Alfidi Capital is not affiliated with any broker-dealer and does not manage money for clients.All information mentioned in this blog is derived from public sources.Alfidi Capital makes no representation as to the accuracy or completeness of this information.Alfidi Capital and its owner, Anthony J. Alfidi, may from time to time hold long or short positions (including options, warrants, rights, and other derivatives) in the securities mentioned in this blog.This blog is provided for informational, educational, and entertainment purposes only and does not constitute a recommendation or solicitation to execute a transaction in any investment product.Investors should consult with a properly licensed and registered investment professional before making any investment decision.The bottom line:Enjoy reading this blog, but the risk you take with investing is entirely your own.